Figure 1: Total number of words

Figure 2: Topic Clouds

## NULL

## NULL

## NULL

## NULL

Figure 3: Histograms

Panel A: Dispersion of agencies per topic

Panel B: Dispersion of Topics per firm-year

\[Topic\_Dispersion_{Firm,Year} = 1 - \sum_{Topic} P^2_{Firm,Topic,year}\]

Panel C: Dispersion of Agencies per Firm-year

\[RegulationDispersion_{firm,year} = 1- \sum_{Topic} \sum_{Agency}P_{Firm,Topic,year} \cdot \omega_{Topic,Agency,year}^2 = 1 - \sum_{Topic} P_{Firm,Topic,year} \cdot HHI_{Topic,Agency}\]

Figure 4: Time Trend

Panel A: 12 Industries

Panel B: FF12 == 1

Figure 5: \(\Delta\) Regulation Dispersion

## *Panel B: Topics with biggest change around 2016 presidential election*

Figure 6: A case study

Table 1:

Table 2: Verification

All variables are normalized

company_FR.frag_norm

agencies_10K.frag_norm

Regulation Dispersion

0.047**

0.002

(0.022)

(0.009)

Topic Dispersion

-0.062**

0.134***

(0.025)

(0.017)

Regulation Complexity

-0.061

-0.076***

(0.038)

(0.017)

Log(Word,10K)

0.026

0.300***

(0.018)

(0.009)

Nsegments

0.014**

-0.002

(0.007)

(0.004)

PPE/AT

-0.023

-0.020**

(0.030)

(0.010)

EBITDA/AT

-0.064***

-0.003

(0.019)

(0.004)

Log(Sale)

0.275***

0.064***

(0.038)

(0.013)

Tobin's Q

0.002

-0.005

(0.012)

(0.004)

Num.Obs.

14592

60534

R2

0.628

0.772

Table 3: Descriptive statistics

Table 4: SGA_AT, TFP, ROA next year

All variables are normalized

1.lead.sga_at_norm

2.lead.tfp_norm

3.lead.roa_norm

4.lead.sga_at_norm

5.lead.tfp_norm

6.lead.roa_norm

Regulation Dispersion

0.043***

-0.036**

-0.059***

0.055***

-0.032*

-0.053***

(0.015)

(0.016)

(0.013)

(0.014)

(0.018)

(0.015)

Topic Dispersion

0.044**

-0.030

-0.012

0.046**

-0.037**

-0.009

(0.017)

(0.020)

(0.021)

(0.019)

(0.018)

(0.018)

Regulation Complexity

0.021

0.004

0.025

0.034

0.005

0.038*

(0.020)

(0.019)

(0.028)

(0.026)

(0.021)

(0.019)

Log(Word,10K)

-0.015

-0.019

-0.135***

-0.015

-0.021*

-0.131***

(0.009)

(0.012)

(0.032)

(0.011)

(0.012)

(0.031)

Nsegments

0.000

0.004

-0.009**

0.003

0.000

-0.008**

(0.004)

(0.005)

(0.003)

(0.004)

(0.005)

(0.004)

PPE/AT

0.071**

-0.239***

-0.080***

0.068**

-0.254***

-0.076***

(0.028)

(0.041)

(0.020)

(0.030)

(0.037)

(0.026)

EBITDA/AT

-0.022**

0.371***

0.339***

-0.023**

0.385***

0.336***

(0.010)

(0.025)

(0.030)

(0.010)

(0.026)

(0.031)

Log(Sale)

-0.303***

0.376***

0.336***

-0.318***

0.362***

0.332***

(0.047)

(0.039)

(0.037)

(0.050)

(0.041)

(0.039)

Tobin's Q

0.107***

0.204***

-0.055***

0.111***

0.209***

-0.054***

(0.010)

(0.017)

(0.011)

(0.008)

(0.020)

(0.009)

Num.Obs.

60534

38922

60534

60534

38922

60534

R2

0.867

0.719

0.637

0.872

0.730

0.653

R2 Adj.

0.848

0.676

0.584

0.850

0.679

0.593

RMSE

0.36

0.53

0.60

0.36

0.52

0.59

Std.Errors

by: FF48

by: FF48

by: FF48

by: FF48

by: FF48

by: FF48

FE: FF48

X

X

X

X

X

X

FE: cik

X

X

X

X

X

X

FE: FF48_year

X

X

X

FE: year

X

X

X

Table 5: Sales growth, assets growth, emp next year

All variables are normalized

1.lead.growth_norm

2.lead.growth.at_norm

3.lead.emp_at_norm

4.lead.growth_norm

5.lead.growth.at_norm

6.lead.emp_at_norm

Regulation Dispersion

-0.099***

-0.143***

0.001

-0.110***

-0.139***

0.012**

(0.017)

(0.024)

(0.015)

(0.022)

(0.027)

(0.006)

Topic Dispersion

-0.012

0.022

0.015

0.003

0.030

0.004

(0.021)

(0.018)

(0.012)

(0.019)

(0.020)

(0.012)

Regulation Complexity

-0.145***

-0.201***

0.032**

-0.155***

-0.195***

0.014

(0.042)

(0.034)

(0.016)

(0.037)

(0.034)

(0.015)

Log(Word,10K)

0.076***

0.099***

-0.021*

0.068***

0.090***

-0.020*

(0.023)

(0.017)

(0.012)

(0.022)

(0.019)

(0.010)

Nsegments

0.002

-0.005

-0.003

-0.003

-0.009

-0.002

(0.005)

(0.005)

(0.004)

(0.004)

(0.006)

(0.003)

PPE/AT

-0.089***

-0.210***

0.068***

-0.069**

-0.194***

0.073***

(0.023)

(0.040)

(0.017)

(0.031)

(0.052)

(0.020)

EBITDA/AT

-0.003

0.054***

0.027***

-0.009

0.049***

0.023***

(0.030)

(0.014)

(0.007)

(0.029)

(0.015)

(0.007)

Log(Sale)

0.559***

0.477***

-0.034

0.583***

0.487***

-0.033

(0.051)

(0.043)

(0.025)

(0.053)

(0.045)

(0.024)

Tobin's Q

0.047***

-0.048***

0.029***

0.044***

-0.049***

0.031***

(0.009)

(0.012)

(0.006)

(0.010)

(0.012)

(0.006)

Num.Obs.

60534

60534

60534

60534

60534

60534

R2

0.363

0.277

0.919

0.399

0.305

0.923

R2 Adj.

0.270

0.171

0.907

0.296

0.185

0.910

RMSE

0.80

0.85

0.29

0.78

0.83

0.28

Std.Errors

by: FF48

by: FF48

by: FF48

by: FF48

by: FF48

by: FF48

FE: FF48

X

X

X

X

X

X

FE: cik

X

X

X

X

X

X

FE: FF48_year

X

X

X

FE: year

X

X

X

Table 6: Fedreg Segments

All variables are normalized

Panel A1 Notices

sga

tfp

roa

growth

growth_at

emp

regul.disp_Notice_norm

0.045**

-0.066***

0.019

-0.105***

-0.127***

0.011

(0.020)

(0.021)

(0.015)

(0.023)

(0.026)

(0.009)

Num.Obs.

60534

38922

60534

60534

60534

60534

R2

0.872

0.730

0.653

0.399

0.304

0.923

Panel A2 Rules

sga

tfp

roa

growth

growth_at

emp

regul.disp_Rule_norm

0.050***

0.001

-0.095***

-0.074***

-0.093***

0.012**

(0.012)

(0.014)

(0.015)

(0.019)

(0.021)

(0.005)

Num.Obs.

60534

38922

60534

60534

60534

60534

R2

0.872

0.730

0.654

0.399

0.305

0.923

Panel B1 RIN

sga

tfp

roa

growth

growth_at

emp

regul.disp_RIN_norm

0.069***

-0.015

-0.120***

-0.088***

-0.122***

0.004

(0.014)

(0.012)

(0.017)

(0.023)

(0.021)

(0.009)

Num.Obs.

60534

38922

60534

60534

60534

60534

R2

0.872

0.730

0.654

0.399

0.305

0.923

Panel B2 Old RIN

sga

tfp

roa

growth

growth_at

emp

regul.disp_old_RIN_norm

0.040***

-0.005

-0.068***

-0.065***

-0.090***

0.014***

(0.011)

(0.013)

(0.016)

(0.019)

(0.020)

(0.005)

Num.Obs.

60534

38922

60534

60534

60534

60534

R2

0.872

0.730

0.653

0.399

0.305

0.923

Table 7: Subsamples

All variables are normalized

Panel A

Model 1 keeps observations in the same icode-500 HP industry code. Model 2 keeps observations with the same number of segments, Model 3 keep observations with the change in total assets below 20%

SGA|ind

SGA|seg

SGA|size

TFP|ind

TFP|seg

TFP|size

Grwoth|ind

Growth|seg

Growth|size

regul.disp_norm

0.041**

0.041**

0.034**

-0.033**

-0.038**

-0.030*

-0.100***

-0.100***

-0.056***

(0.017)

(0.016)

(0.014)

(0.016)

(0.016)

(0.017)

(0.018)

(0.017)

(0.014)

Num.Obs.

54259

56444

44207

34473

35755

28785

54259

56444

44207

R2

0.874

0.870

0.904

0.725

0.722

0.746

0.383

0.376

0.400

Table 8: Industry Composition

All variables are normalized

lead.n_ipo_norm

lead.n_join_norm

lead.n_left_norm

lead.n_peers_norm

regul.disp_norm

-0.049***

-0.024*

0.026**

-0.035***

(0.013)

(0.014)

(0.011)

(0.008)

Num.Obs.

60534

60534

56364

60534

R2

0.786

0.604

0.119

0.915

Table 9 Coauthored Topics

lead.sga_at_norm

lead.tfp_norm

lead.roa_norm

lead.growth_norm

lead.growth.at_norm

lead.emp_at_norm

regul.disp_norm

0.060***

-0.033

-0.062***

-0.111***

-0.153***

0.022***

(0.014)

(0.020)

(0.017)

(0.026)

(0.027)

(0.007)

coauthored

0.014

-0.023

-0.021

-0.011

-0.027

-0.011

(0.009)

(0.017)

(0.015)

(0.017)

(0.027)

(0.007)

regul.disp_norm × coauthored

-0.014**

0.008

0.019

0.006

0.038**

-0.019***

(0.006)

(0.011)

(0.014)

(0.019)

(0.015)

(0.007)

Num.Obs.

60534

38922

60534

60534

60534

60534

R2

0.872

0.730

0.653

0.400

0.306

0.923

Table 10 Lobby next year

All variables are normalized

Dependent variable: log of (1 + lobby expenses next year).

  • Average of lobby expenses next year = 749775.2 dollars

  • Average of log 1 + lobby expenses next year = 7.694036 dollars

  • standard deviation of log 1 + lobby expenses next year = 6.29541 dollars

1.lead.log_lobby_norm

2.lead.lobby_norm

3.lead.log_lobby_norm

4.lead.lobby_norm

Regulation Dispersion

-0.106***

-0.091***

-0.102**

-0.080**

(0.032)

(0.031)

(0.038)

(0.030)

Topic Dispersion

-0.033

0.007

-0.056

-0.025

(0.050)

(0.033)

(0.051)

(0.029)

Regulation Complexity

-0.048

-0.057

-0.067

-0.093*

(0.062)

(0.060)

(0.066)

(0.055)

Log(Word,10K)

0.071**

0.031

0.045

0.015

(0.034)

(0.030)

(0.033)

(0.033)

Nsegments

0.005

0.015*

0.004

0.014

(0.011)

(0.009)

(0.012)

(0.010)

PPE/AT

0.006

0.001

-0.014

0.004

(0.034)

(0.024)

(0.038)

(0.030)

EBITDA/AT

-0.026**

-0.031***

-0.012

-0.026***

(0.012)

(0.007)

(0.015)

(0.009)

Log(Sale)

0.324***

0.224***

0.333***

0.215***

(0.076)

(0.053)

(0.083)

(0.068)

Tobin's Q

-0.005

-0.002

-0.013

-0.010

(0.013)

(0.008)

(0.014)

(0.007)

Num.Obs.

14983

14983

14983

14983

R2

0.611

0.874

0.649

0.887

R2 Adj.

0.559

0.857

0.570

0.862

RMSE

0.62

0.36

0.59

0.34

Std.Errors

by: FF48

by: FF48

by: FF48

by: FF48

FE: FF48

X

X

X

X

FE: cik

X

X

X

X

FE: FF48_year

X

X

FE: year

X

X

Table 11

1 Unexpected Promotion  2 Unexpected Promotion
Words_Notice 0.615**
(0.234)
Words_Rule 0.440*
(0.253)
Words_Notice × Words_hightopic −0.170*
(0.098)
Words_Rule × Words_hightopic −0.334**
(0.159)
Words_hightopic −0.026 −0.061
(0.052) (0.068)
Num.Obs. 932 932
R2 0.712 0.706
R2 Adj. 0.680 0.674
RMSE 0.66 0.66
Std.Errors by: year by: year
FE: year X X
FE: agysub_full X X